DAILY

ANALYSIS | AFRICA
Two thirds of Africans
yet to join the mobile
revolution
Only one in three of the African
population is currently subscribed to
a mobile service, highlighting a major
growth opportunity for regional
operators that are able to extend
affordable services into rural areas.
Wireless Intelligence calculates that
the total number of ‘unique’
individual mobile subscribers in
Africa stood at 356 million in Q4 2012,
representing just 33 percent of the continent’s
population. The one-in-three figure is about
half of Africa’s penetration rate when
calculated by connections, reflecting the fact
that cost-conscious African consumers hold
two SIM subscriptions each on average.
Africa’s subscriber penetration rate is the lowest
in the world. A recent Wireless Intelligence study
found that the total number of unique subscribers
worldwide stands at 3.2 billion, accounting for 45
percent of the world's 7 billion population.
According to a recent World Bank report, there
is still a need to measure the number of persons
with access to a mobile phone, notably among
households where members could theoretically
use the same handset, thereby extending mobile
access. The report gives the example of Senegal
where connections penetration stood at 57
percent in 2009 but household penetration was
estimated at 87 percent, therefore dramatically
extending mobile phone access - considering
that on average each Senegalese household
contains nine people.
ABOUT WIRELESS INTELLIGENCE
PAGE 24
Joss Gillet,
Senior Analyst, Wireless Intelligence
www.wirelessintelligence.com
Our study highlights that one third of the
African population has subscribed to a mobile
service and that affordability remains a key
challenge for mobile operators. Monthly ARPU
stands below US$5 in markets such as
Burundi, Rwanda, Uganda and Egypt, while an
average rural tea farmer in Tanzania earns just
11p a day. In the latter country, Vodacom
noted that future growth will come from rural
areas which currently have low connections
penetration (25 percent in Q3 2012, compared
to 80 percent in urban areas), further adding
that "clearly the growth will start with voice
and text messages before the rural areas
become matured enough to migrate to the
Internet and high speed broadband banner."
The Western Africa region contains 103
million unique subscribers in Q4 according to
our study – just under half of these residing in
Africa's single largest market, Nigeria. Second
is the Northern Africa region (101 million),
which contains large markets such as Egypt,
Algeria and Morocco; followed by Eastern
Africa (82 million), Southern Africa (37
million) and Middle Africa (33 million).
Total African connections are currently
growing by about 15 percent a year, with
year-on-year growth strongest in Middle
Africa (23 percent), Eastern Africa (18
percent) and Western Africa (18 percent).
However, connections growth continues to
be driven largely by multiple SIM ownership.
Africans are calculated to hold 1.96 SIM
cards each, on average, above the global
Wireless Intelligence is the definitive source of mobile operator data,
analysis and forecasts, delivering the most accurate and complete set of
industry metrics available. Relied on by a customer base of over 800 of
the world's leading mobile operators, device vendors, equipment
manufacturers and financial and consultancy firms, the data set is the
most scrutinised in the industry. With over thirteen million individual
data points (updated daily), the service provides coverage of the
performance of all 1,140 operators and 1,153 MVNOs across 3,505
networks, 65 groups and 236 countries worldwide.
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average of 1.85. As is common in other parts
of the developing world, multiple SIM
ownership in Africa occurs mainly due to
budget-conscious consumers accumulating
prepaid SIM cards in order to access as many
low-cost deals as possible.
The impact on connections growth was
confirmed recently by the Ugandan regulator.
The Uganda Communications Commission
(UCC) explained in its 2011/12 half-year Market
Performance Review that “robust subscription
growth is largely premised on aggressive on-net
promotions prevalent during the second half of
the year.” As a result, “second SIM buyers
dominated new subscriptions with marginal first
time SIM acquisitions.”
In the Wireless Intelligence study, Nigeria
was found to have the highest level of
multiple SIM ownership in Africa, at 2.39 SIM
cards per user on average – on a global basis
second only to Indonesia (2.62 SIMs/user).
The country’s largest mobile operator, MTN
Nigeria, reported in Q2 that "only 25 percent
of the gross additions in the market were first
time subscribers. The other 75 percent was
mainly attributable to rotational churn and
multi SIM cards in the market.”
MTN says the trend is being further
exacerbated by aggressive pricing
competition, noting a “multitude of bonuses
on [prepaid] recharge, freebies and other
promotional activity”. It also highlighted the
Nigerian government’s controversial decision
to withdraw fuel subsidies at the beginning of
the year, which MTN claims negatively
affected telecoms spending.
While African operators are presented with a
significant growth opportunity, new subscribers
are increasingly likely to reside in rural areas,
which may lead to infrastructure challenges.
A new GSMA study that looked at Kenya,
Tanzania and Uganda found that 73 percent
of the rural population in these three markets
had mobile coverage, compared to 100
percent in urban areas. The rural population
accounted for 87 percent of the total
population in Uganda and 74 percent in
Tanzania, explaining the low mobile
penetration levels in both countries.
Africa unique subscribers by
region 1
Extending coverage into rural areas in these
markets “presents the operators with challenges
due to unreliability and quality of power
supply,” the study says. The three countries
combined had a total network of 13,225 base
station sites as of Q3 2012, of which 9,957 are
connected to the commercial grid power supply
and the remaining 3,268 base station sites are
‘off-grid.’ Both types are said to rely on
expensive diesel generators due to either poor
power infrastructure or limited grid power.
To connect new African subscribers in rural
areas, operators must also overcome
challenges related to high levels of poverty
(classed as those who live on less than US$2
a day) as detailed in the GSMA's Mobile and
Development Intelligence initiative. Other
barriers to adoption include a lack of basic
education skills (literacy, numeracy etc.),
though the mobile industry itself is playing a
role in addressing this issue via mHealth,
mLearning, mAgri and other initiatives.
Tuesday 26th February MOBILE WORLD CONGRESS DAILY 2013 | www.mobileworldcongress.com
10.5%
23.1%
9.3%
Western Africa
Northern Africa
Eastern Africa
28.2%
28.9%
Southern Africa
Middle Africa
Source: Wireless Intelligence
1 Wireless Intelligence uses the official UN
geoscheme to classify global regions and
subregions